Reconciliation: A Rarely-Used Procedure with Serious Consequences

With the dust settled on the health summit, it is clear that the president and his allies on Capitol Hill intend to plow forward with their sweeping proposal to overhaul the nation’s health sector. As the Los Angeles Times observed, it is also clear that “they will have to do it by themselves.”

And there’s only one way they can “do it by themselves”: an arcane budgetary procedure known as “reconciliation.” Reconciliation lets lawmakers “expedite” consideration of proposals to reduce projected budget deficits, and it allows Senate leaders to circumvent the filibuster — which normally enables a determined minority of 41 or more senators to block legislation. Under reconciliation, a simple majority rules the Senate.

Speculation that Senate Majority Leader Harry Reid will advance Obamacare in this manner has incited fevered debate over the procedure itself. Is it appropriate to use reconciliation on such a controversial and consequential bill?

Senator Reid says it is. He argues that the reconciliation process has been used many times over the last three decades — usually, he claims, at the instigation of Republicans. House Majority Whip Rep. James Clyburn (D., S.C.) chimes in that reconciliation “is a normal thing to do in the Congress. It’s just simply a majority vote. It is nothing out of the ordinary.” Sen. Barbara Boxer (D., Calif.) characterizes reconciliation simply as “the way to govern with a majority.”

The Congressional Research Service reports that 19 reconciliation measures have been enacted into law since the procedure’s first use in the twilight of the Carter administration. It was attempted, but failed, a couple of times more. Reconciliation has been used for virtually all imaginable scenarios — save one: There is no precedent for using it to enact a once-in-a-generation rewrite of the relationship between Americans and their government that appeals exclusively to one side of the aisle.

Even the current Senate concurs that reconciliation ought not to be used for such mega-bills. Last April, 67 senators — including 26 Democrats and then-Republican Arlen Specter of Pennsylvania — supported a resolution to prohibit reconciliation from being used to advance that other mega-bill lurking out there, the cap-and-trade climate-control bill.

Our custom has always been to subject such bigger-than-life bills to a rigorous vetting process that allows affected parties to scrutinize the pros and cons and examine alternatives before ultimately arriving at a broad and bipartisan consensus. For good or ill, this process produced such landmark legislation as our civil-rights laws, Medicare and Medicaid, the Clean Air Act, the North American Free Trade Agreement, welfare reform, and the Kemp-Roth tax cuts. On final reading, each of these legislative milestones received over 60 votes in the Senate and a comparable majority in the House.

With reconciliation, it takes two branches to tango — Congress and the president. In its first use (1980), a defeated Pres. Jimmy Carter and a lame-duck Democratic Congress pushed through a modest package of tax hikes and spending cuts. Since then, reconciliation bills have been enacted under every conceivable combination of Republican and Democratic control.

All seven reconciliation bills enacted on President Reagan’s watch, for example, required the cooperation of a Democratic-controlled House. And after the Democrats regained control of the Senate in 1987, the Gipper negotiated a reconciliation measure with an entirely Democratic Congress. Similarly, the first President Bush negotiated two reconciliation packages with Congresses controlled entirely by Democrats (in 1989 and 1990). His Democratic successor, Bill Clinton, negotiated a reconciliation measure with a Democratic-controlled Congress in 1993.

After the 1994 elections ushered in Republican majorities in the House and Senate, Clinton partnered with his new adversaries on three reconciliation bills. In 1997, he signed two reconciliation measures that cut taxes by $80 billion and spending by nearly $110 billion. Pres. George W. Bush worked with Republican-controlled Congresses on four reconciliation measures, including his dramatic tax cuts of 2001 and 2003. In 2007, he reached agreement on a relatively minor reconciliation measure with the newly elected Democratic majority led by Speaker Nancy Pelosi and Majority Leader Reid.

If you can decipher a pattern here, please let me know.

CONSEQUENTIAL AND POPULAR
In keeping with the American tradition of demanding that consequential legislation enjoy broad bipartisan consensus, the most ambitious reconciliation bills of the past have been widely popular on both sides of the aisle. In these cases, reconciliation was used for procedural reasons, not to force through a bill that couldn’t get 60 votes.

Consider President Reagan’s 1981 package of domestic-spending cuts, the so-called Gramm-Latta bill. It remains the bête noire of liberal acolytes of the welfare state. And that’s understandable. The measure reduced spending by $130 billion over three years on a wide array of federal domestic programs, including food stamps, Medicaid, dairy price supports, and even Social Security. Thirty years ago, $130 billion was real money. But though the Gramm-Latta spending cuts spiked the blood pressure in liberal salons and on the editorial pages of the New York Times, the tone was decidedly different on Capitol Hill. The cuts ultimately sailed through Tip O’Neill’s House on a voice vote. (Yes, a voice vote!) The legislation won an 80-vote majority in the Senate, including the support of 31 Democrats.

The 1996 rewrite of our welfare laws, also a reconciliation measure, prompted similar paroxysms of moral outrage and dire predictions from liberals. Sen. Daniel Patrick Moynihan assailed the reforms as “the most brutal act of social policy since Reconstruction” and predicted that “those involved will take this disgrace to their graves.” In fact, welfare reform proved to be the single most successful social-policy reform in decades. It garnered 328 votes in the House (98 of them from Democrats) and 78 in the Senate (25 from Democrats).

The two reconciliation measures negotiated between President Clinton and the Republican Congress in 1997 set in motion the economic boom of the late 1990s. They, too, attracted huge, bipartisan majorities. Eighty-five senators, including all but three Democrats, supported a package containing $118 billion in spending cuts. An even larger majority — 92 senators, including 37 Democrats — signed on to a reconciliation tax-cut package that included the $500 per child tax credit and a significant reduction in the top rate on capital gains. In the House, the support was similarly overwhelming: 346 votes for the spending cuts (including 153 Democrats) and 389 for the tax cuts (including 164 Democrats).

CONSEQUENTIAL AND CONTROVERSIAL
Several times in our history, reconciliation bills were both truly consequential and controversial. Here, the protections granted under the reconciliation process (i.e., requiring a simple majority for passage in the Senate) were absolutely essential.

As a general rule, reconciliation measures that raised taxes inspired considerable opposition.

In 1982, President Reagan agreed to rescind about $98 billion of the Kemp-Roth tax cuts from the previous year. That move prompted 47 senators (most of them Democrats) to oppose him, thus necessitating reconciliation. Then, in 1990, the first President Bush violated his “read my lips, no new taxes” pledge and worked closely with a Democratic congress to enact $137 billion in tax hikes via the infamous 1990 budget reconciliation bill. It incited years of Republican fratricide and sowed the seeds of the Gingrich Revolution of 1994.

But, while the margins on final passage for both bills were quite narrow, the coalitions for and against them were decidedly bipartisan. That’s a marked and critical difference from the current situation regarding health care.

That leaves three reconciliation battles that were both high-stakes and highly partisan: President Clinton’s tax increase of 1993; the Gingrich Revolution’s pivotal package of tax and spending cuts in 1995; and the acceleration in 2003 of Pres. George W. Bush’s signature tax cuts.

In perhaps the closest analogy to today’s showdown over health reform, Pres. Bill Clinton proposed in 1993 what may still be the largest tax increase in history — a cool quarter-trillion dollars over five years. This tax hike turned out to be downright radioactive. The House passed it by the narrowest of margins, with a mere 218 votes. In the upper chamber, a bipartisan coalition of 50 senators (all 44 Republicans plus 6 Democrats) stood in opposition. Vice President Al Gore took a dramatic trip down Pennsylvania Avenue to cast the tie-breaking vote.

Ultimately, the process allowed a unified bloc of Democrats in the White House and on Capitol Hill to prevail. But the precedent cannot be reassuring to today’s Democratic leaders. Anyone remember the 1994 elections?

Buoyed by its historic success in those elections, the new Republican congressional majority bet the ranch on an equally historic reconciliation package. This one would downsize the federal government — cutting spending by $894 billion, slashing taxes by nearly $250 billion, and enacting sundry other reforms such as overhauling farm programs and opening up the Arctic National Wildlife Refuge to oil and gas drilling.

This exercise proved to be too much for our political system. President Clinton and his party resisted, prompting two government shutdowns and a presidential veto. The Congressional Quarterly concluded that “the new majority seemed to cram several years of work into one when crafting the reconciliation package, but at the end of that one year they had little to show for it.”

Lesson: If you’re going to ram through a mind-boggling package of spending and tax cuts, make sure your party controls both ends of Pennsylvania Avenue.

That is precisely what happened in 2001 and again two years later. Few recall now that in 2001, President Bush’s tax-cut agenda passed with respectable bipartisan support, including 28 House and 12 Senate Democrats. The 2003 package accelerating these cuts, however, was too much for the Democrats. Theatrics ensued, and another vice president had to venture into the Senate chamber to break a 50-50 deadlock.

This time, the political fallout was quite different. President Bush and his fellow Republicans actually prospered at the polls in the 2004 presidential election.

Reconciliation can yield political dividends, it seems. But only when it’s used to force through controversial and consequential tax cuts.

A long-time veteran of Washington policymaking, Mike Franc oversees Heritage’s outreach to members of the U.S. House and Senate and their staffs. From 1993 to 1996, he served as Heritage’s Director of Congressional Relations. In 1996, he served as Director of Communications for House Majority Leader Richard Armey of Texas. Before joining Heritage, he served in the Office of National Drug Control Policy and as Legislative Counsel for then-Representative William Dannemeyer of California. A graduate of Yale University, Franc earned his J.D. from Georgetown University Law Center.

Join The Discussion

What I love about the Heritage Foundation is the lengthy research and annotated texts. You did not do that. Would you kindly consider updating this post to include all that rigorous research into a bibliography? Thanks.

If our representatives really cared about doing the people's business, they would hold a national referendum on the health care bill. But they won't do that because they know it would fail.

Reconciliation evokes images of coming together in agreement, but this act will only serve to drive their constituents farther away -to new representatives who are willing to listen and do what's right.

I thought we had an election in November 2008 to fill up 1/3 of the Senate, the entire House of Representatives, and a President. Was I dreaming? I seem to remember months of talk of a healthcare reform prior to the election, and months of democrats in Congress watering down their bills to appease republicans who wouldn't vote for anything that might be supported by the President. Its unfortunate that we don't have a loyal opposition party anymore, just a party that tries to block everything, obstruct, denigrate their fellow Americans, and hope for failure.

MarkV – sorry – you won't able to find Heritage doing rigorous research on this topic, because it would severly damage theri current arguments and spotlight their hypocrisy.

I suggest you go and read some fo their posts in 2001 and 2003 and see what they were saying about debt and deficits back then. You'll be shocked at how they ridiculed Demcorats for caring too much about debt and deficits and how they had a projected 5.6trillion surplus, so debts and deficits don't matter. You'll see lines all over frm Heritage that state: 'It doesn’t take a math major to figure out that a $1.6 trillion tax cut is small compared to all the extra tax money that will roll into Washington.'

They actually called 1.6trillion small. yet now they call 10b for unemployment extension big. Hypocrisy. They are becoming as credible as Glenn Beck and teabaggers.

First, you do understand that there are 2 bills going on here right? You do not seem to distinguish between them. The first bill is the one Congress passed which was passed with 60 votes and not reconciliation. That bill will most likely be passed by the house without reconciliation.

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There is a second bill which is intended to amend the comprehensive bill though and that bill will contain changes which may or may not include a public option and the Dems will try to pass it using reconciliation which takes 51 votes (a majority).

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Lastly, it should be noted that the process of reconciliation is hardly "arcane". All one needs to do is look at how many times GWB used it to bypass Democratic filibuster.

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You may not like or agree with what is happening and I am not going to debate about that here, but stop trying to trick people into thinking that reconciliation is anything but a majority. It's just not a super majority. Also, stop trying to make it sound like the Dems are pulling some ancient rabbit out of their hats when GWB pushed a tremendous amount of his agenda through just this past decade. It is not "arcane". It is about as common as one gets. If anything needs to be reformed it isn't the reconciliation process. It is the filibuster.

Yes, there was an election, but the proposed government takeover of health care is not what we were promised. We were told that we could keep our current doctors and health insurance plans, but that is just not the truth about this plan.

This plan will destroy Medicare, cutting off health care to the elderly like my mother. And it will cut off care to the disabled like my child.

During all the discussion, one has to ask oneself why is there such a rabid, desperate and frantic effort to pass this – in spite of all the potential fallout ?It's because it's a genuine attempt to obtain an unprecidented amount of power over Americans. That is the prize their eyes are on.

And to them, it's worth all the sacrifices they may have to make to get it.

One only has to ask oneself; would you buy a car and have to pay for it before your could begin to drive it????????

In the mean time, also ask yourself, what will the government be doing with the money that is being collected????? Are they going to be putting into a special LOCK ACCOUNT, or spending it on something else like the've been doing with Social Security all these years????

If past performance is any guarantee of future performance, odds are the system will be broke before we even get to start receiving the benefits.

It is important to keep in mind the importance of a sixty vote majority in the Senate- protection of minority rights against the passions of the slightest majority. As Senator Schumer once said, "A fifty-one seat majority doesn't mean you get your way one hundred percent of the time."

[…] It’s tricky pinning down meaning these days. As with “stimulus,” “moderate” seems to be a word whose definition is misunderstood by certain media members and Presidents of the United States of America. The left are actually the ones who should tone down their domestic efforts, as that would help them avoid having to conspire about how to pass a nation-altering bill in the most temperate-averse method conceivable. […]

Harry, Illinois– the government is already broke and deeper in debt than ever, with no end in sight. Social Security is broke, Medicare and Medicaid are in trouble, even the U.S. Postal Service is going broke.

Our nation is not only in over its head, we may have gone beyond the point of no return. Can this nation be saved? Under the current administration, it appears that saving America is not the goal, but its destruction, in order to rebuild on a Socialist structure.

Healthcare of Americans is not the goal here and never was– a Socialist America is the goal and sadly, the Socialists are winning.

Our public schools, right on though our colleges and universities are little more than Socialist indoctrination centers for our youth. Until our education system has been fixed, nothing will change.

Healthcare is not the issue– the Socialist takeover of America is– and without a shot being fired.

-Reconcilation used for both bush tax cuts that helped our economy how?

with a total cost and increase to the defecit at 2.5 Trillion by 2016.

-Sheri obviously didn't read the bills otherwise she wouldn't have said what was in the bills that is not in either bill. Ive have completely read through hr3590 and 3962 and nothing even close to what she ranted is in either bill.

-total fiscal based defecit increase under gwb and republicans was 6.1 trillion. 5.5 trillion was added by the end of his term. over 1 trillion unaccounted for under private military contracts.

-current healthcare is 90% non competitive. ranked 1st in the industrialized world for waste and fraud. 27th in affordability. its funny that the richest country in the world has over 30 million legal citizens that have no insurance due to profit driven monoplies.

-i just felt like throwing this in. – less then 10% of the entire housing market share was under cra or any other goverment regulation. 85% of all lenders subject to low or high cost subprime mortages had no corrisponding rise in bank failures- fdic reports. oh and yeah, -its actually true. so 90% of all lenders in free market based economics with absolutley no government regualtions are somehow unaccountable?

-look, democrats and President Obama have every damn right to pass a bill. Nobody pushed anything through. this has been open for over a year and the only republican substitute was brought by republicans to cover less then 1% of the entire country.

-republicans don't want healthcare reform. they just don't. they never did. remember just over a year ago when the entire party was telling us that the status-quo is acceptable.

-i love to see all the criticism against this Mr. Franc. finally democrats and independents are growing a pair.

-for all the remarks about november. do you honestly think democrats will lose the house in november or even the senate. why? what have conservatives or republicans offered? seriously what?

-fox news, townhall.com and this website are feeding this inaccurate misinformed public to no end. sometimes I am truly embarrased to be in the same species.

[…] record shows that reconciliation has been used for virtually all imaginable scenarios — save one: There is no precedent for using it to enact a once-in-a-generation rewrite of the relationship betw…. But that is exactly what Majority Leader Harry Reid (D-NV) is attempting to do. According to the […]

[…] record shows that reconciliation has been used for virtually all imaginable scenarios — save one: There is no precedent for using it to enact a once-in-a-generation rewrite of the relationship betw… [4]. But that is exactly what Majority Leader Harry Reid (D-NV) is attempting to do. According to […]

[…] record shows that reconciliation has been used for virtually all imaginable scenarios — save one: There is no precedent for using it to enact a once-in-a-generation rewrite of the relationship betw…. But that is exactly what Majority Leader Harry Reid (D-NV) is attempting to do. According to the […]

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